Wines from the region, located midway between San Francisco and Los Angeles, have won the kind of international acclaim once reserved for California's more famous growing areas of Napa and Sonoma.

And in 2010, a red blend from Paso Robles' Saxum Vineyards was awarded one of winemaking's highest honors when Wine Spectator magazine named it the worldwide "wine of the year."

But in the last few years, California's ongoing drought has hit the region hard, reducing grape yields and depleting the vast aquifer that most of the area's vineyards and rural residents rely on as their sole source of water other than rain.

Across the region, residential and vineyard wells have gone dry.

Those who can afford to — including a number of large wineries and growers — have drilled ever-deeper wells, igniting tensions and leading some to question whether Paso Robles' burgeoning wine industry is sustainable.

"All of our water is being turned purple and shipped out of here in green glass," said Cam Berlogar, who delivers water, cuts custom lumber and sells classic truck parts in the Paso Robles-area community of Creston.

Unlike other states that treat groundwater as a shared resource subject to regulation and monitoring, California's Gold Rush-era rules have generally allowed property owners to drill wells on their land and suck out as much water as they want.

"It's a matter of who has the longest straw at the bottom of the bucket," said Berlogar. The water level in his own 57-foot well has dropped 40 feet over the last six to seven years.

In August 2013, in response to the crisis, San Luis Obispo County supervisors passed a moratorium on new vineyards and other water-dependent projects. But the two-year ban, which will expire this summer, did not apply to projects already in the works, so grape acreage has continued to expand.

Richard Sauret, a longtime resident who grows award-winning Zinfandel grapes, has a reputation for conserving water in his hilltop Paso Robles vineyards. Still, he relies on water pumped from the aquifer when he needs to irrigate, and he worries about that resource running out.

"There is way too much demand. I blame a lot of vineyards like other people do," said Sauret. "There are a lot of farmers who are going to have to farm with a hell of a lot less water."

Change is Coming

Spurred by the drought, California Governor Jerry Brown last year signed a package of bills requiring groundwater-dependent areas to establish local water sustainability agencies by 2017.

The agencies will then have between three and five years to adopt water management plans, and then another two decades to implement those plans.

Some residents worry that Paso Robles can't wait that long.

Aquifer depletion is difficult to model, but one report for the county of San Luis Obispo projected that, even with no additional growth, the water drawn from the basin would exceed that going in by 1.8 billion gallons annually between 2012 and 2040.

"If it goes on unmanaged for another 10 years, it could reach a point where we couldn't correct it," said Hilary Graves, who makes wine under the Mighty Nimble brand.

Graves is a fourth-generation farmer whose ancestors came to California as migrant workers after losing everything during the Dust Bowl.

"I would like to not have to retrace my family's footsteps back to Oklahoma and Arkansas," said Graves.

Water Fight

If most residents agree that there is a crisis, they are far from agreeing on how to address it.

In a divisive 3-2 vote, county supervisors recently decided to move forward on creating a new water district that will be governed by an elected nine-member board.

But many longtime residents and some of the region's winemakers worry that large, well-funded newcomers will spend freely to get sympathetic board members elected and then stick local landowners with huge bills for infrastructure projects that disproportionately benefit the larger players.

Susan Harvey, a rural homeowner and president of the nonprofit North County Watch, called the model for the proposed district "we pay, they pump."

The residents are particularly concerned about politically connected and deep-pocketed new arrivals, including Harvard University, which has invested more than $60 million of endowment funds in the purchase of about 10,000 acres in Santa Barbara and San Luis Obispo counties, and Stewart and Lynda Resnick, the Beverly Hills billionaires behind FIJI Water and the Wonderful brand of pomegranate, citrus and nut products.

The Resnicks' company bought Paso Robles' Justin Vineyards & Winery in 2010 and two years later purchased a 740-acre ranch that had been dry-farmed before it was converted to irrigated vineyards.

Jennifer George, a spokeswoman for Justin's parent company, Wonderful, said the winery's new vineyards have been planted with grapes that take less water, and that the company will eventually transition to dry-farming the land. Harvard declined to comment for this story.

'Pick Your Poison'

Fifth-generation farmer Cindy Steinbeck, of Steinbeck Vineyards & Winery, helped found Protect Our Water Rights (POWR), one of several groups that have sprung up around the region's water issues, and is deeply skeptical about a new water agency. Her group is urging landowners to join a quiet title action to protect their water rights, and would rather see the courts oversee any plan to manage the basin's water.

"We are fighting the big boys," said Steinbeck, who says her goal is to prevent family farmers from being pushed out of Paso Robles.

The region will be "an important test case for how other highly stressed groundwater basins might introduce new regional oversight," said Jay Famiglietti, senior water scientist at NASA's Jet Propulsion Laboratory.

The Paso Robles Agricultural Alliance for Groundwater Solutions (PRAAGS) has been the driving force behind the district. Its board includes a representative from J. Lohr Vineyards & Wines, and at least one director affiliated with Harvard's property interests in the area.

Other district supporters include Justin Vineyards and County Supervisor Frank Mecham, who voted to establish the new agency.

Mecham says he understands residents' concerns about it, but he also understands the need for water management. Mecham's great-great-grandfather lost his cattle ranch in the area to a drought.

"This is the cold, hard reality: You will be managed one way or another. You've got to pick your poison," he said.